BREAKFAST DEALS: Tinkler returns

Nathan Tinkler inks another deal, a stake in a coal upstart, while an NZ firm looks set to become Australia's largest retirement living operator.

Nathan Tinkler is a restless one. Just weeks after getting the Whitehaven Coal-Aston Resources ship to sail, Tinkler has splashed out for a major stake in an unknown coal play called Blackwood Corporation. The move comes just as Whitehaven lobs an anticipated bid for Coalworks, in which it owns 19.9 per cent thanks to the Boardwalk Resources side-deal from the Aston merger. Meanwhile, Ivanhoe Australia is easing up on its search for cornerstone investors as the market wonders when Rio Tinto will offload the company after nabbing its Canadian parent. Elsewhere, Alesco shareholders have been told to stay put, while a New Zealand player is set to become the country’s largest retirement living company with the help of two Australian-owned companies.

Nathan Tinkler, Blackwood Corporation

Young Australian billionaire Nathan Tinkler has secured another deal, just weeks after inking the $5.1 billion merger between Whitehaven Coal and Aston Resources, which netted him a $1 billion stake. And he’s sticking with what he knows; coal. Tinkler has placed $28.4 million with Blackwood Corporation at 30 cents a share, which is a 50 per cent premium to the previous trading price. The company is focused on coal tenements in Queensland, including the Browse Basin.

The deal was struck after negotiations with Hong Kong’s Noble Group, which watched its stake drop from 53 per cent to 33.85 per cent. Mulsanne Resources, an associated company of the Tinkler Group, has ended up with 33.85 per cent, so all’s equal between the two. Tinkler will take a board seat, along with associate Chris Lauritzon.

Coalworks, Whitehaven Coal

Tinkler’s deal comes as the final stage of the complicated Whitehaven Coal-Aston Resources marriage comes about. Whitehaven has lobbed a $172 million takeover offer at Coalworks at an even $1 a share. The proposal always looked probable after Whitehaven picked up a 19.9 per cent stake in Coalworks through the Aston merger.

The target has told its shareholders to take no action, given that it’s a relatively skinny 17 per cent premium to the previous trading price. That’s all well and good, but it’s also a 100 per cent premium to the levels Coalworks was trading at before the Whitehaven-Aston deal was announced and investors started looking downstream.

Whitehaven also said that it does not consider the target’s 33 per cent stake in Orpheus Energy – focused on Australia and Indonesia – to be a core asset and a divestment would be considered if it wins Coalworks. Grant Samuel and Goldman Sachs are acting as corporate advisers to Whitehaven, while Corrs Chambers Westgarth is taking legal duties.

Ivanhoe Australia, Rio Tinto

Ivanhoe Australia is easing up on its plans to sell cornerstone stakes in all of its Cloncurry precinct assets amid widespread speculation that new majority owner Rio Tinto will hive the company off. According to Fairfax, Ivanhoe Australia chief executive Peter Reeve has flagged the potential sale of two of the company’s four Cloncurry assets – which includes projects for copper-gold, molybdenum and rhenium – instead of all four. Ivanhoe has been looking for 25 per cent stakeholders in all in order to fund them.

The immediate inference is that the change of control at Ivanhoe’s Canadian parent company could prove to be the catalyst for a sale of Ivanhoe Australia, and such a move could impact any possible Cloncurry transactions. Rio has made it clear that it’s interested in the Mongolian megaproject Oyu Tolgoi, and that’s about it.

Speaking of Rio, the World Bank’s private sector development financing vehicle is reportedly set to invest $US150 million ($148 million) of equity in the mining giant’s Simandou iron ore project in Guinea. According to The Australian, the International Finance Corporation is looking at adding to its 5 per cent stake in the project to cover some of the costs being incurred by current owners Rio and China’s Chalco.

Alesco Corporation, Dulux Group

Alesco Corporation directors have told shareholders not to take any action on the $188 million offer from Dulux Group. The board said that the offer of $2 a share would be seen in the context of its recent rationalisation of assets, strong balance sheet and progress towards implementing a three-year turnaround.

This is a similar defence to that offered by Spotless Group against the Pacific Equity Partners, but with some crucial differences. Spotless was firmly marked as a takeover target and institutions that weren’t subscribers to its turnaround plan made up a significant part of its register. They wanted out and PEP provided a way.

By comparison, Alesco’s board is in an enviable position. While Spotless shares traded at a discount to PEP’s offer and shareholders piled on the pressure to sell, Alesco’s stock has risen to a 5 per cent premium over the Dulux offer. That means that when the directors use their corporate-speak for ‘you need to give us more money', they have the blessing of the register.

Metalifecare, Vision Senior Living, Goldman Sachs Australia

New Zealand’s Metlifecare looks set to become the country’s largest retirement living company with the acquisition of two Australian-owned players. In a three-way deal announced yesterday, Metlifecare will acquire Vision Senior Living, which is 68 per cent owned by Goldman Sachs Australia, and Private Life Care Holdings, which is part of Retirement Villages Group. The deal is worth a combined $NZ980 million ($764 million).

The retirement living space has been going through a state of rationalisation recently, particularly in Australia, with an ageing population expected to generate increased earnings in coming years. Just last week, a report emerged that FKP Property Group was thinking about combining its three retirement assets into one $1.5 billion portfolio, in order to make it more attractive to interested parties.

Japanese LNG demand

Japan has given companies in the LNG and coal sectors a reason to celebrate. According to Fairfax, a senior member of the ruling party in Japan, Masayuki Naoshima, claims that these two commodities are at the top of Japan’s shopping list as it looks to secure its medium-term energy needs.

Japan has shut down its nuclear operations in the wake of the Fukushima disaster and is looking to Australia for supplies of alternative sources of energy. The participation of Inpex in the $32 billion Ichthys LNG site in Darwin could be just the first of a series of reminders that Japan is Australia’s second largest trading partner.

Wrapping up

Genworth Financial has reportedly told staff that it’s planning to rekindle its float plans as soon as possible in 2013. Last month the company was forced into a rather embarrassing retreat from its $800 million float plans for 40 per cent of the Australian business after a swift deterioration in profit numbers. But, according to The Australian Financial Review, Genworth is targeting the first quarter of 2013 for an IPO.

Sticking with financial services, The Australian reports that former Commonwealth Bank chief executive David Murray reportedly encouraged some of the bank’s board members to take over American Express at the height of the global financial crisis. The Australian claims that Murray, who had well and truly handed the reigns over to Ralph Norris by this stage, urged the bank to consider taking Amex when valuations were at their lowest. While it would have proved to be a shrewd move, the risk at the time would have been in the heavens.

And finally, mining giant BHP Billiton has splashed a lazy – by its standards – $50 million for a 40 per cent stake in the Banambu Deep site. The project is the next proposed exploration drill by Woodside Petroleum and BHP has put up some cash to cover the costs in order to get a slice of any rewards.

IMPORTANT: This information is general financial product advice only and you should consider the relevant product disclosure statement (PDS) or seek professional advice before making any investment decision. Product disclosure statements for financial products offered through InvestSMART can be downloaded from this website or obtained by contacting 1300 880 160. You should consider the product disclosure statement before making a decision about a product. All indications of performance returns are historical and cannot be relied upon as an indicator for future performance.